Trade War Worries Help Gold Soar, Still Poised for Weekly Loss

Gold futures are soaring to end the trading week, but the yellow metal is still on track for a weekly loss. With President Donald Trump introducing new tariffs and tweeting the benefits of a trade war, investors jumped into the safe-haven asset as the market took a dive.

April gold futures surged $18.90, or 1.45%, to $1,324.10 per ounce at 14:13 GMT on Friday. Gold rebounded from Thursday’s lowest 2018 settlement after posting its first monthly loss since October. Despite the latest gains, the precious metal remains poised for a 0.6% weekly loss.

Silver, the sister commodity to gold, is also rallying to finish the trading week. May silver futures climbed $0.259, or 1.59%, to $16.535 an ounce. The white metal slipped to its lowest level in about two months on Thursday. Silver will be flat for the week.

The market was spooked at the end of the week by protectionist statements coming out of the White House. Trump told steel executives on Thursday that they will “have protection for a long time,” which prompted the president to announce later that day a 25% tariff on steel imports and a 10% levy on aluminum imports.

On Friday, President Trump tweeted that “trade wars are good”:

When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!

Automakers and other manufacturers warned of higher prices and other nations adopting countermeasures and retaliation methods. Meanwhile, the Dow Jones shed more than 300 points in the morning trading session, while industrial stocks were volatile.

Following the announcement, the US dollar fell 0.34% as the greenback will stay flat for the week. A weaker buck is good for dollar-denominatedcommodities like gold and silver because it makes it cheaper for foreign investors to purchase.